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South Korean cryptocurrency exchange Bithumb has won a first-instance court ruling in its effort to recover mistakenly sent Bitcoins, after a Seoul court ordered a user to return about 194 million South Korean won, or roughly $145,000, generated from selling the assets.
The ruling, issued Thursday, August 27, 2026, is the latest development stemming from a February distribution error in which Bithumb accidentally credited users with a huge quantity of Bitcoin during a promotional reward campaign.
The exchange subsequently launched a recovery operation and said it had recovered almost all of the assets. However, several users who had already sold some of the Bitcoin did not return the proceeds, prompting Bithumb to pursue legal action.
The case is being closely watched because the dispute could help establish how courts handle mistakenly sent Bitcoins when recipients have already converted the assets into cash or other investments.
The supplied report does not contain direct quotations from the presiding judge or a Bithumb executive. To avoid fabricating comments, the quotations below are limited to wording contained in the source material rather than invented statements.
The Seoul Central District Court ruled in Bithumb’s favor in a lawsuit seeking the return of unjust enrichment from a user who had sold Bitcoin received during the erroneous February distribution.
According to the supplied report, the court determined that approximately 194 million won earned through the sale of the erroneously distributed Bitcoin should be returned to Bithumb.
The ruling represents the first of four lawsuits brought by the exchange against users who did not return funds after receiving mistakenly sent Bitcoins.
The report described the court’s decision as potentially strengthening Bithumb’s position in the three remaining cases, where the exchange is expected to pursue recovery on similar grounds.
The legal basis for the ruling had not been made public at the time of the report, leaving questions about the precise reasoning used by the court.
It was also unclear whether the defendant would appeal the decision.
The central dispute is significant because the Bitcoin in question was not allegedly obtained through hacking, theft or unauthorized access. Instead, the assets were credited to users because of an error by the exchange itself.
That raises a complicated question for the cryptocurrency industry: what happens when an exchange mistakenly transfers digital assets to a customer and the customer sells them before the mistake is corrected?
The incident began in February during a Bithumb promotional reward campaign.
According to the report, the exchange mistakenly distributed approximately 620,000 Bitcoin to participating user accounts. The value of the incorrectly distributed assets was reported at around $5 billion at the time.
Bithumb subsequently began efforts to recover the mistakenly sent Bitcoins.
In March, the exchange said it had recovered approximately 99% of the assets distributed in error. The recovery effort, however, did not resolve every case.
Some users had already disposed of the assets and did not return the resulting proceeds. Bithumb therefore turned to the courts to seek compensation.
The supplied report states that the exchange had managed to recover “approximately 99% of the Bitcoins that were sent in error.”
— Bitcoin Sistemi, reporting on Bithumb’s March recovery update
The report also describes the court’s ruling as requiring proceeds from the sale of the erroneously transferred Bitcoin to be “returned to the exchange.”
— Bitcoin Sistemi, reporting on the first-instance ruling
The distinction between recovering the original cryptocurrency and recovering its sale proceeds is important. Once mistakenly sent Bitcoins have been sold, the exchange can no longer simply reclaim the same coins from the user’s account. Instead, it may have to pursue the monetary value obtained from the sale.
Bithumb’s legal strategy could have wider implications for cryptocurrency exchanges that experience similar operational errors.
Automated reward systems are designed to process large numbers of transactions quickly. But the February incident demonstrated how a mistake in such a system can result in digital assets being credited to users at a scale far beyond the intended reward.
Unlike a conventional bank transfer, cryptocurrency transactions can move quickly between trading accounts, wallets and other platforms. That can complicate efforts to reverse an erroneous transfer, particularly if recipients sell the assets before an exchange identifies the problem.
The Bithumb case therefore places renewed attention on the legal responsibility of customers who receive mistakenly sent Bitcoins.
The fact that Bithumb has already recovered most of the incorrectly distributed assets may also become relevant in the remaining lawsuits. The exchange is expected to rely on similar arguments as it seeks compensation from other users who allegedly failed to return the value of assets they received in error.
The cases could ultimately provide greater clarity about whether recipients are legally required to return cryptocurrency that they know was mistakenly credited to their accounts, particularly after converting it into another form of value.
For exchanges, the incident also highlights the operational risks associated with automated reward and distribution systems. A single input error can create consequences that extend beyond the platform itself, potentially affecting customers, market prices and the exchange’s balance sheet.
The ruling does not mean that every accidental cryptocurrency transfer will automatically result in the same legal outcome. The circumstances surrounding each transaction, the recipient’s conduct and the applicable law will determine the outcome of individual disputes.
Nevertheless, Bithumb’s victory provides an important early test of how the legal system can respond when mistakenly sent Bitcoins are sold rather than returned.
The exchange’s remaining three lawsuits will be particularly significant. If Bithumb prevails in those cases as well, the combined decisions could strengthen the industry’s understanding of customer obligations following erroneous digital-asset transfers.
The February incident has already exposed the operational risks associated with large-scale cryptocurrency reward systems. The subsequent litigation adds another dimension: exchanges must not only prevent distribution errors but also establish effective procedures for recovering assets when mistakes occur.
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